The odds are still in landlords’ favour across rental markets in Australia as national vacancy rates remain steady at a multi-year low.
Domain’s latest rental vacancy report showed that Australia’s vacancy rate was at 1.5% for the second consecutive month in November, the lowest level achieved since Domain’s records began.
Domain chief of economics and research Dr Nicola Powell said there were mixed movements across capital cities, with Sydney, Canberra, and Darwin hitting an increase while Melbourne, Adelaide, and Hobart went the opposite direction.
“As the country opens up with the first month of eased restrictions following the latest lockdown, and as economic conditions improve, there will be further downward pressure on the national vacancy rate,” Dr Powell said.
“The positive outlook of reaching vaccination targets, increased job security and the opening of both domestic and international travel will benefit both renters and landlords.”
Tight capital markets
Despite the individual movements in vacancy rates, all capital cities have tighter rental markets compared to last year, except in Canberra where conditions remained the same and Darwin where vacancies rose marginally.
Dr Powell said conditions continued to remain tighter across capital cities compared to the April 2020 COVID-induced peak, except for Melbourne, which currently has a vacancy rate that is marginally off its April 2020 vacancy rate.
“This is a significant turnaround considering the exposure Melbourne has to international students and overseas migrants as a source of rental demand,” she said.
Two of the biggest factors driving Melbourne’s vacancies was the latest easing of the lockdown and the move to allow onsite rental inspections — these have seen the city’s vacancy rate decline to 3%.
“This downward trend, coupled with a 4.2% month-on-month fall in rental listings, could see Melbourne’s rental market eventually become a landlord’s one. A real possibility once international borders reopen,” Dr Powell said.
Meanwhile, Sydney’s vacancy rate was still at its lowest level since September 2018 despite increasing marginally to 2.3% in November.
In Canberra, the vacancy rate in November was higher than before the lockdown in July, possibly due to the jump in the number of rental listings over the month.
Outside these three cities, rental markets across smaller capitals remained tight, with vacancy rates still at multi-year lows in Perth, Hobart, Adelaide, and Brisbane.
Photo by Amos Lee on Unsplash
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